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US: SEC’s Jay Clayton Shows Interest in Crypto-Based ETF

The US SEC chairman sounds receptive to the idea of tokenized ETFs.

Jay Clayton Open to Tokenized ETF

The US Securities and Exchange Commission (SEC) has posed several regulatory and compliance challenges to the cryptocurrency industry that have, in fact, greatly stunted digital currency’s adoption among the legacy finance stakeholders.

Close followers of the crypto space are aware of the numerous times when the financial watchdog has vetoed applications for a Bitcoin (BTC) or crypto ETF in the US. However, according to a recent development, SEC chairman Jay Clayton has shown his interest in the idea of tokenized ETFs.

In a webinar with the Chamber of Digital Commerce on October 2, Clayton said, “It may very well be the case that […stocks] all become tokenized.”

For the uninitiated, tokenized stocks are one of an array of financial products that come under the DeFi umbrella. Other similar products include the likes of non-custodial loans and decentralized stablecoinssuch as DAI, and others.

Additionally, Clayton expressed his openness toward a tokenized ETF – which is essentially a stock whose price tracks an index.

Clayton said:

“We’re willing to try that; our door is wide open. If you want to show how to tokenize the ETF product in a way that adds efficiency, we want to meet with you, we want to facilitate that.”

Easier Said than Done

Although Clayton’s words do give a sense of optimism toward the prospect of a crypto ETF going live soon, if recent SEC actions are anything to go by, it’s hard to take his words with conviction.

Earlier this year, in January, the SEC asked investors to stay away from investing in Initial Exchange Offerings (IEOs) as they might not be compliant with securities laws.

Similarly, in January, the SEC slammed Initial Coin Offering (ICO) platform ICOBox and its founder Nikolay Evdokimov with a mammoth $16 million fine for operating as an unlicensed broker and selling unregistered securities via ICOs.

The draconian regulations and lack of clarity developed by the SEC toward the crypto industries necessitates a broader regulatory framework that accounts for all nitty-gritty of the rapidly developing cryptocurrency industry.

Against that backdrop, As  reported on September 25 that Coincenter has been working with two US Congress representatives to introduce two new bills to clarify the US Commodity Futures Trading Commission (CFTC) and SEC jurisdiction over cryptocurrencies.

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Crypto Stats

CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin45,344 2.14 % 3.61 % 19.57 %
Ethereum1,416.2 1.62 % 6.66 % 26.60 %
Cardano1.330 4.55 % 1.18 % 18.58 %
Tether1.010 0.14 % 0.81 % 0.46 %
Polkadot33.94 1.96 % 2.60 % 13.80 %
Binance Coin209.64 2.59 % 8.79 % 18.55 %
XRP0.4181 1.30 % 6.52 % 19.24 %
Litecoin165.44 1.72 % 5.78 % 27.60 %
Chainlink24.77 1.68 % 9.35 % 27.65 %
Stellar0.4095 1.86 % 9.23 % 16.91 %